In 2010, LifeLock Inc. entered into a settlement with the Federal Trade Commission (FTC) and 35 state attorneys general for $12 million for allegations involving false promises and lack of security. The settlement was memorialized with an order and agreement.
On July 21, 2015, the FTC filed suit against LifeLock in the U.S. District Court of Arizona alleging that the company has violated the order and agreement as it continues to make deceptive claims about its security practices and fails to notify individuals when breaches occur. In the settlement, LifeLock agreed to provide the same level of security to its customers as financial institutions, but the FTC says LifeLock hasn’t implemented those security measures, including protecting sensitive personal information such as credit card information, Social Security numbers, and bank account numbers.
LifeLock responded to the suit by stating “We disagree with the substance of the FTC’s contentions and are prepared to take our case to court.”
Coincidentally, that same day, a federal judge dismissed a proposed class action case against LifeLock claiming it misled its investors about compliance with the FTC Order in its annual 10-K filing. The suit alleged that the FTC investigation was buried in small print in the middle of the disclosure which constituted a deceptive practice. The Judge disagreed and dismissed the suit.